Albert Einstein: now there’s a fella that knew a thing or two about….erm, everything. It was the hirsute genius that stated that ‘compound interest is the greatest mathematical discovery of all time’ and the ‘eighth wonder of the world’.

Now, we know what you’re thinking: a) what in the blue blazes is compound interest, and b) what does that have to do with sports betting? Well, dear reader, you are about to find out.

Compound interest is the amount of interest calculated on a loan or payment plus the addition of accumulated interest already devised from previous periods of the loan/payment. Basically, when applied to the financial world it is profit upon profit.

No wonder Einstein got his knickers in a twist about it….

To answer b) above, compounding is a method used by many professional punters to control their bankroll and ensure that sound theory is applied to each of their wagers. It is the continuous reinvestment of profits gained back into the original amount; essentially, your stake size increases exponentially as your kitty does.

In short, a compound staking strategy should eradicate human error from your betting activity while ensuring your bank remains virile and progressive; assuming you have a decent strike rate on your bets, of course.

Crunching the numbers

For punters seeking a get rich quick scheme, strategies like compounding simply aren’t going to work. They are accumulative, disciplined and calculating, with the upshot being that it would take an extraordinary run of losses for your bank to reach zero. If you were to go on such a streak without a staking plan, you would reach the bottom far quicker anyway!

The key to an effective staking system is that it correlates to your betting balance; not some delusions of grandeur you may have about owing your own gold-plated yacht. It’s boring, we know, but if you want to accumulate long-term profits through your betting activities then you’d better get switched on to the idea that slow and steady very much wins the race.

So here’s the idea behind compounding: your stake size increase as you win, and decreases after you lose.

Simple enough in theory, but how do the numbers read? Firstly, we need to determine our bank size. For the sake of mathematical ease, let’s say we’re going to start with £100.

Ext, we need to determine what we want our percentage to be. This is our ‘compound factor’; a snazzy term we’ve just invented on the spot. This compound factor will never change, but of course the actual monetary value of our stake will change as our balance grows and detracts.

We advise a compound factor of 5%. In this example, our initial stake would thus be £5.

Now here’s a key point to reiterate time and again: this is the maximum amount you will wager on a bet ever again. The actual amount will fluctuate, but 5% of your bankroll is now your stake size for life. Get to know it, love it and enjoy it.

Now we have the simple task of ‘doing the math’ to keep things ticking over. Here’s an example:

Here’s where the next link in the chain comes in: we must now recalculate our stake six according to our compound factor. So if United won in Bet 1, then for Bet 2 our stake is 109.55/20, or £5.48 to keep things simple. If United lost, then our new stake is £4.75. And so on….

Here’s a visual on that 5% staking compound, and how your bank will look following an imaginary series of results:

Bet Number

Stake Size

Odds

Win/Lose

Bankroll

1

£5

10/11

Win

£109.55

2

£5.48

11/8

Lose

£104.55

3

£5.28

7/10

Win

£113.53

4

£5.68

4/5

Win

£123.75

5

£6.19

Evens

Lose

£117.56

6

£5.88

5/6

Lose

£111.68

Even accounting for a 50% success rate with bets often placed at odds-on, we have managed to grow our bankroll by around 11% in just six bets. You wouldn’t get that rate of interest at the bank!

And to reiterate, this is just six bets worth; which could take, what, a week? Extrapolate this sort of data over a year and if your success rate remains stable at 50% – and these are wagers placed at or just below evens remember – you will see significant growth.

Finding the winners….well, that’s your business. But hopefully this quick look at the compound staking plan has armed you with the discipline and knowhow to get stuck in; all you need is a calculator!